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Gold prices rose in the domestic futures market as escalating tensions between the US and Iran boosted safe-haven demand. MCX gold April futures climbed 0.20% to ₹1,55,110 per 10 grams, while silver gained 0.65%. However, a strengthening dollar index, which touched 98, limited further upside.
MCX Gold, Silver Gain on Geopolitical Fears
New Delhi: Gold prices rose in the domestic futures market on Friday, amid rising tensions between the US and Iran. At around 9:45 am, gold for April delivery was trading 0.20% higher at ₹1,55,110 per 10 grams on the Multi Commodity Exchange (MCX). Silver for March delivery jumped 0.65% to ₹2,42,974 per kilogram. Geopolitical uncertainty has driven investors to seek safer investment options.
Although gold prices rose, the dollar's strength limited this upside. The dollar index reached the 98 level, marking its fourth consecutive session of gains. The dollar has gained more than one percent this week and is poised for its best weekly performance since early October. Strong US economic data and signs of a dovish stance from the Federal Reserve have supported the dollar.
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A strengthening dollar is generally considered negative for gold. When the dollar strengthens, gold becomes more expensive against other currencies, which impacts demand from foreign buyers. This could slow demand for gold in the international market.
Media reports indicate that tensions between the US and Iran are rising, and there is speculation about possible military action over the weekend, although no final decision has been made. During such geopolitical risks, investors turn to safe assets like gold, which supports its price.
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Markets remain uncertain about the US Federal Reserve's interest rate decision. Recent weekly jobless claims data has fallen to a five-week low, indicating stability in the labor market. According to CME's FedWatch tool, the probability of a rate cut at the June meeting is estimated at around 50%. Minutes from the January FOMC meeting also indicated that policymakers are divided on rates. Investors are now eyeing the fourth-quarter GDP data and the PCE Price Index report, which could play a key role in determining the Fed's next policy direction.
